Taxes in Columbia/Richland County and economic development (Forest Acres, Lexington: sales, houses)

[Akhenaton06]

State commerce secretary Joe Taylor wrote an editorial (http://www.thestate.com/2010/10/28/1532535/taylor-transportation-tax-will.html - broken link) in The State back in October arguing against the penny sales tax for transportation needs that was on the ballot in November because he claimed they would further hamper economic development in Columbia and Richland County:

I will be the first to say that sound infrastructure is critical to economic development, but the bottom line is businesses cannot afford tax increases at this time. It is time to make Columbia a business-friendly community so jobs and investments can come here as they have to other areas of the state and region...

In addition to an already-high sales tax rate, a splattering of taxes and fees such as the hospitality tax and business license fees, higher property tax rates and long and cumbersome permitting processes by the city add up to a laundry list of disincentives that continues to hamstring growth and investment in the Columbia area.

What say ye? Are higher taxes the main reason why Columbia and Richland County in particular don't seem to be on the radar for the larger economic developments that come to the state?

[waccamatt]

I don't think taxes are high in Richland County so I doubt that is the issue. I think politics plays a part.

[LexingtonDad]

A recent story in the State said that Richland County has the highest property taxes in the state. Add to that the number of special sales tax zones and it can get pricey to do or operate a business in Richland. And with the city of Columbia being part of Richland county you know the tax burden on the county will only get heavier as the years go by.

My company currently is located in Richland county. We have discussed that if we ever had an opportunity we would move to Lexington. Barring anything short of a fire or someone making a great offer on our property it won't happen but I think it says a lot that we have that plan in place.

[Woodlands]

I believe it is definately the politics of the metro. Democrat-Richland vs Republican Lexington, Big City versus Small City, a River in the middle, some have said race (which may or may not be a real issue- i.e. the Atlanta Effect.) Throw it all together and voila. I dont doubt that taxes and business climate may play a role also.. but it all begins with leadership. Every little town and county wants there little piece of the pie and doesnt want to give up any ground if they can help it. Unfortunately 'Regionalism' is just a fancy poli sci word coined on some liberal college in the eyes of many of our areas leaders. You can appear in front of one local government councils and say we need more Regionalism... and I guarantee that someone would stand up and claim that you were a socialist

[Chi2Midlands]

In terms of economic development, I don't think taxes, or at least tax rates, play a particularly large role in Richland County's competitive stance. That doesn't mean they don't play any role - I think on certain margins it definitely could - LexingtonDad's anecdote isn't the only time I've heard taxes playing a role (although in the case I'm familiar with it was locating in the City of Columbia vs. unincorporated Richland County). On the other hand, for the most part, it's splitting hairs. I don't feel Richland County taxes are THAT much higher than Lexington that I'm getting a raw deal. Verizon relocated their call center from Forest Acres to Elgin just inside the Richland County line - so obviously they did not feel they had to flee Richland County altogether (they just moved to a much cheaper greenfield location). At a certain level, you get what you pay for, and what I look for is value rather than the absolute lowest tax bill. I suspect this is what Verizon felt, too. If Richland County taxes are so bad, why do we have Blue Cross Blue Shield, Siemens, Bose, potentially Google, etc.?

Since I've lived in Illinois, Missouri, and Virginia, I'll say that South Carolina taxes overall aren't either particularly high or particularly low. Our residential property taxes are very low, for example (too low in my opinion), while our income and personal property taxes are somewhat high. I paid less income tax in supposedly "blue" Illinois (which has a flat 3% state income tax). While Virginia has a similar personal property tax system, I found their sales taxes in the 4.5-5% range to be much more tolerable.

Unfortunately, our messed-up swiss-cheese tax system has placed a relatively heavy burden on businesses in terms of tax revenue, especially after the lowering of owner-occupied residential property taxes with Act 388 four years ago. Swapping it with higher sales tax would be tolerable if it weren't for all those exemptions granted to favored businesses by our wonderful legislature. For example, transportation companies are exempt from paying aviation fuel tax - so that means UPS's large operation at Columbia Metro Airport pays NO fuel taxes! A recent study showed that if you eliminate these exemptions, our sales tax rate could be as low as around 3% and still generate the same revenue. That political structure and culture of the legislature means that for us to be a "business friendly" environment, many corporations have to game the system to get the State House folks to bend their way (video poker anyone?), which disadvantages small businesses and others who are not well-connected with the legislature. This is why I get concerned about our sales taxes, combined with local option sales taxes, reaching the 8-9% range - it is not evenly distributed. That's a bigger outrage to me than one particular county/city's tax "advantage" over another in a relatively low-tax state like SC.

Some folks will always prioritize the lowest tax rates. I've seen this in other jurisdictions, too. For example, in the suburbs north & northeast Atlanta, some residents have located in Gwinnett County rather than North Fulton County to lower their property tax bill. I respect that decision, but North Fulton has some of the best public schools in Georgia - so it goes back to you get what you pay for (to be fair, Gwinnett has some great public schools that are competitive with North Fulton, but don't seem to be as uniformly as good). I know some in the Midlands will move to Lexington or even Kershaw to escape higher property tax bills - but I would only say that sometimes there are reasons why taxes are higher in some jurisdictions. Moreover in Columbia/Richland there is a lot of exempted state and university-owned property that hampers the building of a robust tax base.

[LexingtonDad]

LexingtonDad's anecdote isn't the only time I've heard taxes playing a role (although in the case I'm familiar with it was locating in the City of Columbia vs. unincorporated Richland County)

I should have clarified, it is the city of Columbia that we would flee, not so much the county at this time. I see a trend where more of the burden is having to be carried by fewer taxpayers and I don't see it improving anytime soon.

It's interesting you would use the Atlanta example. I lived there for more than 20 years before moving here and chose to live in Gwinnett county because of the taxes and schools. You want to compare the schools in North Fulton to all of Gwinnett and that would serve your argument but wouldn't it be more fair to compare all of Fulton county to Gwinnett in order to make an honest comparison? IIRC Gwinnett had a much higher rating overall despite spending less per student than Fulton. And isn't it telling that North Fulton has been trying to secede from Fulton county for years? It comes back to taxation without representation, North Fulton people think that they don't get the services their taxes rate and could greatly improve their standard of living if allowed to self-govern. Fulton fights succession because they know the northern suburbs are the ones that pay the freight for the entire county. And the city of Atlanta has been trying to annex it's way to solvency for the last 20 years and is not beyond using any pressure they can to expand their tax base (sound familiar?)

Which gets me back to my point. I would prefer to not locate a business or my personal residence in the city of Columbia or Richland county because I see much the same of what I witnessed in Atlanta. The city of Columbia is determined to deliver more services to more people (not businesses) and that will require taxes to increase. Once they have squeezed that sponge dry it won't be long before they will look to Richland county as a source of revenue.

[Columbiadata]

Gwinnett County is in serious trouble now because of over-development. They got left holding the bag when development didn't pan out according to projections and when the population needed to fill up development never came.

[Akhenaton06]

So are there other reasons besides tax burdens that the larger economic development projects in SC don't seem to go to the Midlands, i.e. lack of certain established industrial clusters, lack of political clout, lack of very large tracts of available land, etc.?

[LexingtonDad]

Originally Posted by Columbiadata

Gwinnett County is in serious trouble now because of over-development. They got left holding the bag when development didn't pan out according to projections and when the population needed to fill up development never came.

LOL. It's now the 2nd largest county in the state and growing. Don't look now but they are still building houses there.

[Columbiadata]

Originally Posted by LexingtonDad

LOL. It's now the 2nd largest county in the state and growing. Don't look now but they are still building houses there.

You should read the AJC more often. Gwinnett's hurting. (My last off-topic comment, sorry)